An analysis projects the hypothetical disruption a cyberattack from a quantum computer could have on global financial markets.
The continued development of quantum computing technologies stands to have a major impact on classically-encrypted digital networks, with a new report emphasizing the financial sector as a potential target for powerful quantum algorithms.
Researchers at the Hudson Institute discussed the report’s highlights concerning quantum computing’s impact on the global financial system, specifically focusing on the Federal Reserve and its networks that facilitate bank-to-bank transactions, called Fedwire.
“The combination of the reliance on digital security that will be exposed to quantum intrusion, internally centralized operational design and the overall concentration of network topology within Fedwire drastically increases the potential for a systemically disruptive event,” the report summary reads.
While researchers acknowledge that the figures of potential financial losses from a quantum computer hack are rough estimations, the report adds to the growing literature underscoring the necessity for post-quantum cryptography well before a viable quantum computer can be used against classical computers.
“The idea was that here you have this possible threat because of the nature of quantum computers and the way in which large scale quantum computers would be able to factorize the prime numbers that underlie public encryption systems,” said Arthur Herman, a senior fellow at Hudson’s Quantum Alliance Initiative. “This was a threat that needed to be understood, not just simply as a theoretical challenge to public encryption systems and cyber security as a whole, but also one that needed to be quantified.”
The final results of the analysis suggest that a hack executed by a quantum computer on macroeconomic financial institutions could result in an indirect GDP loss between $2 trillion and $3.3 trillion.
“Overall, our results demonstrate that a quantum-enabled cyberattack on Fedwire, or any other RTGS system or key financial market infrastructure (FMI), would result in catastrophic financial losses for the national economy,” the report summary states.
Alex Butler, the associate director of the QIA at Hudson, clarified that the projected loss of $2 trillion was the result of a hypothetical cyber attack, whereas the maximum impact of $3.3 trillion represents a sophisticated, ongoing breach that compromises a particularly valuable financial target.
Proactive solutions to counter this growing threat echo suggestions making rounds within federal advisory groups: joint Federal Reserve and Fedwire adoption of quantum-resistant algorithms highlighted by the National Institute of Standards and Technology, a formal a post-quantum strategy determined by the Federal Reserve with other lending institutions and a Congressional deadline for the 12 member banks of the Federal Reserve to adopt post-quantum cybersecurity standards.